Dying Without A Will

Let’s first dispel the common misconception that inevitably comes up here. No, the state does not take away all your money if you die without a will. That is a common misconception that we hear from clients and sometimes Islamic speakers that discus this topic. Yikes!

And if the state does indeed take away your assets (say in the event you have no heirs in the United States), there are legal procedures and ways to take those asset back. But there is one tragic consequence of dying without a will – you don’t get to choose how your assets are distributed. When an individual passes without a will, he/she is considered to have passed intestate. In such a case, the intestacy laws of the state in which person who passed lived in dictate how the assets are distributed.

In other words, you have the right to choose how your assets are distributed through a will. But if you don’t take advantage of this and don’t execute a proper will, the state’s law in which you lived dictated how your assets are distributed. Often, if not the majority of cases, these default state laws will distribute assets very differently from the Islamic inheritance schedule if that is your preference. Each state has different intestate laws (how assets are distributed).

Take the following scenario: Ahmad is married to Sara, and they have two grown children. Ahmad and Sara own a large bank account in joint tenancy, and Ahmad has a 401k naming Sara as the beneficiary. When Ahmad dies, Sara receives the 401k proceeds and inherits the bank account outright. If Ahmad owned a good deal of other property that would have passed under a will, this property would pass pursuant to the intestacy laws of the state they live in.

So in Michigan, Sara would inherit the first $150,000 of the intestate property, plus 1/2 of the balance, and your descendants (children) inherit the remaining in equal shares depending on the number of children. In Texas, if you leave a spouse and children, 1/3 of the estate goes to your surviving spouse, and the children inherit the rest in equal shares.

More importantly, if you have children under the age of 18 years old, the will would provide whom you wish to take care of your children in the event you unexpectedly pass. Your estate plan should also include certain basic documents with regards to your finances and healthcare issues and whom should have power to act on your behalf in the event you cannot.